Impax Asset Management, a leading investor in the environmental space, has spoken out about the attractive investment opportunities presented by areas like renewable energy and water, after recording strong financial performance in 2013.
The London-based firm’s flagship investment trust, Impax Environmental Markets, returned 32.2% for the last calendar year, compared to its benchmark, the MSCI All Countries World Index, which returned 20.5%.
The vehicle, which is set up as its own company, saw its share price rise 46% over the year. It invests in companies working in the clean energy, water, waste and energy efficiency sectors and was named best environmental fund at the Investment Week ESG Awards in November.
Impax said its impressive outperformance of the benchmark was testament to the environmental market’s continuing recovery. At a press event on Tuesday evening, chief executive Ian Simm said market “dislocations” in technology, legislation and corporate strategy provided sustainable investors with a wealth of opportunities.
Simm said, “The drivers of our markets continue to strengthen, with significant news in science, policy and technology fuelling investor interest.
“In 2013 all our strategies performed very well compared to global equities and their respective environmental benchmarks. Impax Environmental Markets plc had a particularly pleasing year, and our water strategy, which marked its five-year anniversary on December 1 2013, maintained its position as the top performing fund in the water sector.”
Impax identified fossil fuel divestment as an emerging theme for investors, citing research on so-called ‘stranded assets’ by the Carbon Tracker Initiative as evidence supporting the reallocation of high-carbon assets. In 2013, Impax said divestment from such stocks was a win-win for investors.
At the press briefing, investment manager Lisa Beauvilain highlighted how policy and regulation – particularly on environmental issues – meant investments in fossil fuels would become increasingly constrained.
Away from Impax Environmental Markets, all but one of Impax’s four listed equity strategies outperformed the benchmark set by the MSCI index.